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Business Use of Gasoline and Diesel Fuel

You can claim a credit for federal excise tax you paid on fuels you used:

  • On a farm for farming purposes (Ex: fuel used to run a tractor while plowing)
  • On a boat used for commercial fishing
  • For off-highway business use. This is fuel used in a trade or business, or in an income-producing activity like:
    • Using stationary machines like:
      • Generators
      • Compressors
      • Power saws
      • Similar equipment
    • Cleaning
    • Using mobile machines like:
      • Forklift trucks
      • Bulldozers
      • Earthmovers

Off-highway business use doesn't include use in a registered highway vehicle.

You must report the credit you claim as income on Schedule F if both of these are true:

  • You're a farmer.
  • You claim a deduction for this tax as part of your total fuel expense on Schedule F.

Also, you might deduct the total cost of fuel you use on Schedule C for off-highway business use or commercial fishing. If so, you must report the amount you claim as income on Schedule C.

To claim this credit, complete Form 4136: Credit for Federal Tax Paid on Fuels at www.irs.gov.

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